This article comes from the introduction of the BNEF fact book.
For the last three years, the Sustainable Energy in America Factbook has documented the revolution transforming how the U.S. produces, delivers, and consumes energy. In 2014, that revolution continued, and the long-term implications of these changes are coming into sharper focus. To single out just a few tell-tale headlines from the hundreds of statistics presented in this report: from 2007 to 2014, U.S. carbon emissions from the energy sector dropped 9%, U.S. natural gas production rose 25%, and total U.S. investment in clean energy (renewables and advanced grid, storage, and electrified transport technologies) totaled $386 billion. This third edition of the Bloomberg New Energy Finance Factbook (144 pages) presents the latest updates on those trends, with special emphasis on 2014 happenings.
The year was a notable one not just in terms of progress achieved by some sustainable energy sectors but also in terms of two key developments in the broader context. The first is the growth of the U.S. economy, which has increased by 8% since 2007 and has been gaining steam in the past few quarters. The Factbook shows that advances in sustainable energy have been concurrent with this growth, and have partially fueled it. The second is the collapse of oil prices. While there is no explicit link between oil (which in the U.S. is used mostly for transport) and most sustainable energy technologies (which are used mostly in the power sector), the oil price shock has a profound global impact and may result in ‘second-order’ effects which could impact U.S. sustainable energy.
Finally, the Factbook evidence brings into focus one unmistakable theme: the broader U.S. ecosystem is clearly preparing for a future in which sustainable sources of energy play a much larger role. As evidence, consider these developments that surfaced or accelerated in 2014:
- Critical new policies were introduced that hinge on the promise of sustainable energy technologies. Most momentous were the Obama administration’s power sector regulation and bilateral climate pact with China. But other key policies were rolled out that take the long view on clean energy integration, including New York State’s plan to overhaul regulation of its electric industry to better accommodate more flexible and cleaner sources of energy.
- Industries with significant energy-related cost exposure gravitated to the U.S. as a base for operations. Companies for whom feedstock or energy is a fundamental cost driver, such as firms in natural-gas-intensive industries and data centers with big electricity footprints, recognize that the economics here are among the most attractive in the world from the perspective of energy buyers.
- Major new infrastructure projects advanced to accommodate the immense influx of these technologies. This included major expansions of natural gas pipelines and deployments of smart grid technologies.
- More capital flowed to financial vehicles specifically aimed at sustainable energy development. This included ‘yieldcos’ and green bonds, which should pave the way toward raising huge sums of capital needed for the sustainable energy future to come to fruition.
The Sustainable Energy in America Factbook provides a detailed look at the state of U.S. energy and the role that a range of new technologies are playing in reshaping the industry. The Factbook is researched and produced by Bloomberg New Energy Finance and commissioned by the Business Council for Sustainable Energy. As always, the goal is to offer simple, accurate benchmarks on the status and contributions of new sustainable energy technologies.
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